Hyderabad: Hyderabad-based Bheema Cements Limited is looking at options, such as roping in a strategic partner, to meet the funding need of its expansion as well as financial restructuring plans, as per to unconfirmed reports.
The company owns a cement plant with a one million-tonne yearly production capacity at Ramapuram in the neighbouring Nalgonda district. It had obtained clearances for the extension of the mounted capacity by an added 1.5 million tonnes and also to set up a 45-Mw power plant offered for captive usage.
Sources in the know said that the promoters of Bheema Cements would be prepared to divest a significant equity if they found a right partner and right assessment.
Other options like preferential issue of equity stocks to the investors or qualified institutional placement (QIP) were also under concern, it is learnt. When reached, the company management refused to offer any comments in this consider.
As per to the sources, the company was looking to increase about Rs 350 cr in direction of the equity financing of the suggested extension & also to restructure its fiscal liabilities like bank loans. The promoters hold 62 % of the total equity stocks of the company, as per to the BSE.
Bheema was amid the several local cement players who took up capacity extension when they were riding a wave of healthy cash flows, with a view to capturing a large market need that was projected before the beginning of the economic downcycle.
Subsequently, the cash flows dwindled when the consumption in Andhra Pradesh alone reduced from a peak of 40 million tonnes in 2009 to just 20-25 million tonnes afterwards.
Coming under fiscal strain, the smaller companies began looking at other ways to finance the extension or to decrease the debt burden. Companies like Anjani Cements & Jayajoti Cements had sold their plants to bigger peers in this procedure.
Nalgonda houses one of the prominent cement clusters in Telangana strategically nearer to its greatest market, Hyderabad, moreover being linked to other significant markets through rail transport.
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